Alternative energy proposals

8/12/2019 Alternative energy proposals

1/17

CITY COUNCIL COMMUNICATION FORM

FROM: Anne Small, Director of General Services (Ext. 249)

THROUGH: Deb Hinsvark, City Manager (Ext. 240)

DATE: March 4, 2014

ITEM: Information about solar purchasing opportunitiesand other energy savings mechanisms beingconsidered.

NEXT STEP: Council may direct the City Manager to take immediateaction regarding one opportunity or another.

Additionally, staff recommends the development of an

energy purchase and usage policy to guide futureenergy saving opportunity decisions.

___ DIRECTION X INFORMATION

I. REQUEST OR ISSUE:

AGENDA ITEM # 2.


2/17

IV. BACKGROUND INFORMATION:

1) In November 2013, the City requested, from Clean Energy Collective,proposals for replacing the energy usage at Centennial Hall and at theCommunity Center. Those proposals are attached. Both proposals enablethe City to make its purchase net of a 30% discount and a presalediscount. The Community Center investment would be less than half thecost of Centennial Hall because solar panels already offset some of the costof electricity at the Community Center. With each, the initial investment is

paid for by offset energy costs within 18 years with a conservativeassumption of an average credit increase of 3% per year after year 9. Asnoted in the February 11 Council meeting, the amount of credit per wattthat has been agreed upon by YVEA is only certain for 20 years. At thatpoint, the credit would be renegotiated and could be less attractive than thefirst 20 years. However, the initial investment should be completelyreturned by that time, so any credit would be a positive.

2) In addition to this possible partnership with CEC, the City is also inpreliminary conversations regarding a solar garden on property at the Cityswastewater treatment campus. At this time, there is nothing definite toreport on that initiative. We have only recently entered into talks with CECand have not yet discussed it with YVEA.

3) Our Facilities department has been working to incorporate ideas generated

in the McKinstry report into City projects. A report is attached that identifiesthose projects that have been completed, those that are in this yearsbudget and those identified for future budgets. Most of the low pay-backitems have been accomplished by in-house staff and through Phase I of the


3/17

5) Without a defined, strategic energy purchase and usage policy, the City is

unable to maximize the return on our investments. An energy purchase andusage policy will develop goals related to how we purchase energy,developing energy efficiencies, establishing revolving and project funds andidentifying incentives.

V. LEGAL ISSUES:

Unknown

VI. CONFLICTS OR ENVIRONMENTAL ISSUES:

The majority of these efforts are in preliminary stages such that all possibleconflicts are as yet, unknown.

VII. SUMMARY AND ALTERNATIVES:

Staff is not asking for direction at this point. However, the Craig solar gardenopportunity may not wait for our next budget cycle, and Council may want to directthe City Manager to take supplemental budget action regarding it. Staff recognizesthe CEC offer is a better return for residential users, and it takes a few more yearsfor a commercial return on investment. Also, the power generated by each panel isan estimate and the full savings might not be realized. Nevertheless,

staff considers this purchase as an opportunity no internal overhead coststo implement. Facilities will continue to use best energy efficiency practices forcurrent energy improvements.


4/17

March 4, 2014

City of Steamboat Springs (Centennial Hall)

137 10thSt

Steamboat Springs, CO 80477

Clean Energy Collective (CEC) is pleased to present The City of Steamboat Springs with the opportunity to own solar

panels in the YVEA Community Solar Array. YVEAs Community Solar program reduces monthly electricity bills,

protects against inflation and provides a positive financial payback, all with no changes to your facilities or additional

operating costs. The renewable energy system proposed leverages available discounts and incentives for the lowest

price, and we have provided an example of ongoing financial savings it generates to ensure the best payback.

System Size Year 1Panel Size (watts) Panels Watts Electric Power Credits $23,014

300 486 145,800 Total Savings $23,014

System Price First Year Payback 5.7%

Per Watt Total First 25 Years

Gross Price $4.64 $676,929 Electric Power Credits $593,969

30% Discount

From Federal Tax Credit

($1.39) ($203,079)

Total Savings $593,969Pre-Interconnection

Discount($0.50) ($72,900)

Savings vs. Purchase Price $193,019

Net Purchase Price $2 75 $400 950 25 Year ROI 48%


5/17

ESTIMATED POWER PRODUCTION AND SAVINGS

Power Credit Escalator 3.00% Number of Panels 486

Starting Power Credit Rate $0.10000 Watts 145,800

Purchase Price $400,950

50-Year Payback 422%

Year

Annual

kWh

Credit

Rate

Est. Power

Credits

O&M

Expense

Total Est.

Savings

Cumulative

Savings

1 230,144 $0.10000 $23,014 $0 $23,014 $23,014

2 227,831 $0.10000 $22,783 $0 $22,783 $45,797

3 225,517 $0.10000 $22,552 $0 $22,552 $68,349

4 223,203 $0.10000 $22,320 $0 $22,320 $90,670

5 220,890 $0.10000 $22,089 $0 $22,089 $112,758

6 218,576 $0.10000 $21,858 $0 $21,858 $134,616

7 216,263 $0.10000 $21,626 $0 $21,626 $156,242

8 213,949 $0.10000 $21,395 $0 $21,395 $177,6379 211,635 $0.10000 $21,164 $0 $21,164 $198,801

10 209,322 $0.10152 $21,251 $0 $21,251 $220,052

11 207,008 $0.10457 $21,647 $0 $21,647 $241,699

12 204,695 $0.10771 $22,047 $0 $22,047 $263,746

13 202,381 $0.11094 $22,452 $0 $22,452 $286,198

14 200,068 $0.11427 $22,861 $0 $22,861 $309,059

15 197,754 $0.11769 $23,275 $0 $23,275 $332,33416 195,440 $0.12123 $23,692 $0 $23,692 $356,026

17 193,127 $0.12486 $24,114 $0 $24,114 $380,140

18 190 813 $0 12861 $24 540 $0 $24 540 $404 680


6/17

How the YVEA Community Solar Program Works

Yampa Valley Electric Association (YVEA) customers now have the opportunity to purchase solar panels located in the

community-owned solar array that Clean Energy Collective is currently building south of Craig, Colorado. This solar array

is available to both residential and commercial customers and will be online in 2014.

Monthly Power Credits

Each month, YVEA will calculate the amount of kWhs attributable to each customer in the solar array. Once the kWhs

attributable to each customer are determined, YVEA will apply a credit to the customers electric bill that is the productof the kWhs produced and the Power Credit Rate. To help offset the impact of rising energy prices over the life of the

system, the Power Credit Rate shall be equal to the greater of $0.10 or the weighted average cost per kilowatt-hour of

the Residential and Commercial classes for the prior calendar year, which is currently estimated at $0.07781. As energy

prices rise and the cost of YVEAs electricity increases beyond $0.10/kWh, the Power Credit Rate will equal that higher

average cost per kWh. For example, with 5% annual energy price inflation, the base rate paid will exceed $0.10/kWh in

the sixth year, at which point the Power Credit will be increased to match that rate thereafter. Credits are applied to

electric bills one month in arrears and used to directly offset the monthly electricity usage charges on the bill.

YVEA will continue to bill all customers for the actual usage under prevailing tariff rates and will apply the solar PowerCredits as a single line item entry on the electric bill. The Power Credits will offset usage charges, which will reduce the

amount of the current months expense. Any excess credits will be rolled over and applied to future months billings.

Federal Tax Credit

The current federal tax code includes an available tax credit incentive for individuals and businesses who install a solar

PV system on their property. This direct tax credit is unavailable to offsite community solar customers. CEC, however, is

able to provide a 30% discount in the one-time system price by capturing the federal tax credit for the entire array. This

discount is equal to the value of the federal investment tax credit for solar installations. As a result, all CEC customers,

regardless of their tax status, can experience the full value of the tax incentive without having to file for anything on


7/17

Financing

CEC has financing partners available to provide loans for the purchase of interest in the solar arrays.

Customer Purchase Restrictions

Under YVEAs Community Solar Program, customers cannot generate solar power in excess of 120% of the electricity

they consume each year. With your historical annual consumption info from YVEA, CEC can size a system that will be

sized appropriately to offset up to 100% of your total electricity expense.

Transfer and Sale

Power Credits may be assigned to any meter under your YVEA account, at any time. The reassignment capability allows

you the opportunity to move the Power Credits from one location or account as your organizations needs change. You

can sell your panels in the solar array at any time, to any other qualifying YVEA customer.

Operations & Maintenance Program

CEC is responsible for the ongoing operations and maintenance of the Yampa Valley Community Solar Array. Ongoing

operations and maintenance includes active daily monitoring of production and weather information, as well as real-

time visibility into actual production. Any unexpected degradation in production is flagged and investigated by CEC and

our maintenance personnel. To ensure that maintenance is provided over the life of the array, CEC establishes a

separate O&M Trust account, which holds all of the funds necessary to pay for maintenance, insurance, property taxes

and land costs.


8/17

CECs service and maintenance program is anchored by the creation of the O&M Trust and the funding that is placed in

the account. The O&M Trust account is funded with an initial contribution by CEC and ongoing monthly contributions of7.85% of the value of the electricity generated by the array (the stream of Power Credits). The Trust Account is

established to ensure that the solar facility is able to operate for years to come, independent of CECs continued

operations.

The CEC O&M Program provides:

A segregated Trust Account that holds all of the Operations and Maintenance funds, the contract with YVEA, theland lease and all of the manufacturers warranties.

Real time monitoring of the arrays production. Real time monitoring of the weather and irradiation at the array. Baseline production monitoring against the expected production per year, not just the manufacturers

warranties. If production falls by more than 2%, the array is inspected and faulty components are replaced or

repaired.

Annual inspections of the array by certified technicians. 25 year panel warranties from the manufacturer. 10 year successive inverter warranties from the manufacturer. 10 year installation warranty from the installation contractor. Immediate repair or replacement of faulty or defective parts. Insurance against all damages at full replacement value.


9/17

Get Started Today

Complete ALL of the following steps to reserve your system.

1. Choose your system size:kW System Size: Price: Deposit:

2. Send your Payment and InformationComplete all of the information on this page and then send with yourrefundable deposit check payable to: CEC Deposit TrustMail to: CEC, P.O. Box 1828, Boulder, CO 80306

Your deposit is fully refundable and secures your system in the array on a first-come, first-serve basis.

3. E-Sign your Agreements Once we receive your information and deposit, we will create your customeragreements. You will receive an e-mail with instructions for completing the agreements electronically via CECs

secure website.

4. Customer Information for all agreements (print)______________________________________________________________________________

Business or Organization

______________________________________________________________________________

Contact Name

______________________________________________________________________________

City State Zip County

______________________________________________________________________________

Mailing Address (if different than physical address above)


10/17

March 4, 2014

City of Steamboat Springs (Community Center)

137 10thSt

Steamboat Springs, CO 80477

Clean Energy Collective (CEC) is pleased to present The City of Steamboat Springs with the opportunity to own solar

panels in the YVEA Community Solar Array. YVEAs Community Solar program reduces monthly electricity bills,

protects against inflation and provides a positive financial payback, all with no changes to your facilities or additional

operating costs. The renewable energy system proposed leverages available discounts and incentives for the lowest

price, and we have provided an example of ongoing financial savings it generates to ensure the best payback.

System Size Year 1Panel Size (watts) Panels Watts Electric Power Credits $10,797

300 228 68,400 Total Savings $10,797

System Price First Year Payback 5.7%

Per Watt Total First 25 Years*

Gross Price $4.64 $317,572 Electric Power Credits $278,652

30% Discount

From Federal Tax Credit

($1.39) ($95,271)

Total Savings $278,652Pre-Interconnection

Discount($0.50) ($34,200)

Savings vs. Purchase Price $90,552

Net Purchase Price $2 75 $188 100 25 Year ROI 48%


11/17

ESTIMATED POWER PRODUCTION AND SAVINGS

Power Credit Escalator 3.00% Number of Panels 228

Starting Power Credit Rate $0.10000 Watts 68,400

Purchase Price $188,100

50-Year Payback 422%

Year

Annual

kWh

Credit

Rate

Est. Power

Credits

O&M

Expense

Total Est.

Savings

Cumulative

Savings

1 107,969 $0.10000 $10,797 $0 $10,797 $10,797

2 106,883 $0.10000 $10,688 $0 $10,688 $21,485

3 105,798 $0.10000 $10,580 $0 $10,580 $32,065

4 104,713 $0.10000 $10,471 $0 $10,471 $42,536

5 103,627 $0.10000 $10,363 $0 $10,363 $52,899

6 102,542 $0.10000 $10,254 $0 $10,254 $63,153

7 101,457 $0.10000 $10,146 $0 $10,146 $73,299

8 100,371 $0.10000 $10,037 $0 $10,037 $83,3369 99,286 $0.10000 $9,929 $0 $9,929 $93,265

10 98,200 $0.10152 $9,970 $0 $9,970 $103,234

11 97,115 $0.10457 $10,155 $0 $10,155 $113,390

12 96,030 $0.10771 $10,343 $0 $10,343 $123,733

13 94,944 $0.11094 $10,533 $0 $10,533 $134,266

14 93,859 $0.11427 $10,725 $0 $10,725 $144,991

15 92,773 $0.11769 $10,919 $0 $10,919 $155,91016 91,688 $0.12123 $11,115 $0 $11,115 $167,024

17 90,603 $0.12486 $11,313 $0 $11,313 $178,337

18 89 517 $0 12861 $11 513 $0 $11 513 $189 850


12/17

How the YVEA Community Solar Program Works

Yampa Valley Electric Association (YVEA) customers now have the opportunity to purchase solar panels located in the

community-owned solar array that Clean Energy Collective is currently building south of Craig, Colorado. This solar array

is available to both residential and commercial customers and will be online in 2014.

Monthly Power Credits

Each month, YVEA will calculate the amount of kWhs attributable to each customer in the solar array. Once the kWhsattributable to each customer are determined, YVEA will apply a credit to the customers electric bill that is the product

of the kWhs produced and the Power Credit Rate. To help offset the impact of rising energy prices over the life of the

system, the Power Credit Rate shall be equal to the greater of $0.10 or the weighted average cost per kilowatt-hour of

the Residential and Commercial classes for the prior calendar year, which is currently estimated at $0.07781. As energy

prices rise and the cost of YVEAs electricity increases beyond $0.10/kWh, the Power Credit Rate will equal that higher

average cost per kWh. For example, with 5% annual energy price inflation, the base rate paid will exceed $0.10/kWh in

the sixth year, at which point the Power Credit will be increased to match that rate thereafter. Credits are applied to

electric bills one month in arrears and used to directly offset the monthly electricity usage charges on the bill.

YVEA will continue to bill all customers for the actual usage under prevailing tariff rates and will apply the solar Power

Credits as a single line item entry on the electric bill. The Power Credits will offset usage charges, which will reduce the

amount of the current months expense. Any excess credits will be rolled over and applied to future months billings.

Federal Tax Credit

The current federal tax code includes an available tax credit incentive for individuals and businesses who install a solarPV system on their property. This direct tax credit is unavailable to offsite community solar customers. CEC, however, is

able to provide a 30% discount in the one-time system price by capturing the federal tax credit for the entire array. This

discount is equal to the value of the federal investment tax credit for solar installations. As a result, all CEC customers,


13/17

Financing

CEC has financing partners available to provide loans for the purchase of interest in the solar arrays.

Customer Purchase Restrictions

Under YVEAs Community Solar Program, customers cannot generate solar power in excess of 120% of the electricity

they consume each year. With your historical annual consumption info from YVEA, CEC can size a system that will be

sized appropriately to offset up to 100% of your total electricity expense.

Transfer and Sale

Power Credits may be assigned to any meter under your YVEA account, at any time. The reassignment capability allows

you the opportunity to move the Power Credits from one location or account as your organizations needs change. You

can sell your panels in the solar array at any time, to any other qualifying YVEA customer.

Operations & Maintenance Program

CEC is responsible for the ongoing operations and maintenance of the Yampa Valley Community Solar Array. Ongoing

operations and maintenance includes active daily monitoring of production and weather information, as well as real-

time visibility into actual production. Any unexpected degradation in production is flagged and investigated by CEC and

our maintenance personnel. To ensure that maintenance is provided over the life of the array, CEC establishes a

separate O&M Trust account, which holds all of the funds necessary to pay for maintenance, insurance, property taxes

and land costs.


14/17

CECs service and maintenance program is anchored by the creation of the O&M Trust and the funding that is placed in

the account. The O&M Trust account is funded with an initial contribution by CEC and ongoing monthly contributions of7.85% of the value of the electricity generated by the array (the stream of Power Credits). The Trust Account is

established to ensure that the solar facility is able to operate for years to come, independent of CECs continued

operations.

The CEC O&M Program provides:

A segregated Trust Account that holds all of the Operations and Maintenance funds, the contract with YVEA, theland lease and all of the manufacturers warranties.

Real time monitoring of the arrays production. Real time monitoring of the weather and irradiation at the array. Baseline production monitoring against the expected production per year, not just the manufacturers

warranties. If production falls by more than 2%, the array is inspected and faulty components are replaced or

repaired.

Annual inspections of the array by certified technicians. 25 year panel warranties from the manufacturer. 10 year successive inverter warranties from the manufacturer. 10 year installation warranty from the installation contractor. Immediate repair or replacement of faulty or defective parts. Insurance against all damages at full replacement value.


15/17

Get Started Today

Complete ALL of the following steps to reserve your system.

1. Choose your system size:kW System Size: Price: Deposit:

2. Send your Payment and InformationComplete all of the information on this page and then send with yourrefundable deposit check payable to: CEC Deposit TrustMail to: CEC, P.O. Box 1828, Boulder, CO 80306

Your deposit is fully refundable and secures your system in the array on a first-come, first-serve basis.

3. E-Sign your Agreements Once we receive your information and deposit, we will create your customeragreements. You will receive an e-mail with instructions for completing the agreements electronically via CECs

secure website.

4. Customer Information for all agreements (print)______________________________________________________________________________

Business or Organization

______________________________________________________________________________

Contact Name

______________________________________________________________________________City State Zip County


16/17

Completed Projects Green

Apporved Project for 2014 Blue

Future Projects not funded Red

Building MeasureTotal Yearly

Cost SavingsProject Price

Payback

in years

Airport Firefighting Building Interlock IR Heaters with Garage Doors $941 $3,413 3.6

Lighting Upgrades $181 $2,786 15.4

Destratification Fans * $2,430 *

Ambulance Barn HW/DHW Pipe Insulation $123 $512 4.2

Replace Non-condnensing Boiler


Animal Shelter RTU Scheduling, Replace Thermostats $515 $1,195 2.3HW/DHW Pipe Insulation $107 $341 3.2


Centennial Hall HVAC Scheduling, Relocate IT Condensing Unit, DDC $5,747 $102,499 17.8

Solar Domestic Hot Water $1,184 $28,416 24

Replace Non-condensening Boilers


City Hall Vending Misers $168 $476 2.8


Install DDC System and VFD's on all Roof Top Units * $17,000 *

Haymaker Maintenance HW/DHW Pipe Insulation $631 $341 0.5Solar Water Heating $2,655 $66,505 25.1

Boiler Replacement $966 $18,555 19.2

Lighting Upgrades $156 $5,618 36

Howelsen Lodge Relocate Olympian Hall Temperature Sensors, DDC, HW OA Reset $368 $34,508 93.7


Replace Flood lights in Olympian Hall with LED $100 $400 4

Facility Energy Savings Projects Summary


17/17

Building MeasureTotal Yearly

Cost SavingsProject Price

Payback

in yearsHowelsen Ice Arena HVAC Improvements and Scheduling, DDC $23,158 $114,613 4.9

Chiller Head Pressure Control $7,512 $7,168 1

Chiller Waste Heat Recovery $3,217 $83,615 26

Power Factor Correction $3,743 $10,112 2.7

HW/DHW Pipe Insulation $3,270 $6,233 1.9

Lighting Upgrades $8,649 $79,402 9.2Install Destratification Fans * $20,000 *

Connect Lockerroom Lights to DDC System

Longthong Road Snowmelt Optimization

Replace Non-condensening Boilers

Mountain Fire Station Split System Scheduling, Replace Thermostat $158 $853 5.4

Reset Garage Temperature Set Point, Replace Thermstat $382 $853 2.2


Public Safety Building Valve Replacement, HW OA Reset, HVAC Scheduling, DDC $1,382 $62,883 45.5

Reset Garage Temperature Set Point $370 $256 0.7

Lighting Upgrades $1,501 $10,974 7.3

Public Works Building HVAC Scheduling, OA Reduction, Thermostat Replacement $325 $4,608 14.2

Reset Garage Temperature Set Point $661 $256 0.4

Install Block Heater Controllers $3,106 $10,155 3.3


Install Return Air Mixing Boxes

Install Destratification Fans

Inerlock Locker Room Lights with Motion Sensor

Tennis Center RTU Scheduling $132 $32,388 246

Lighting Upgrades $19,368 $205,887 10.6Install Destratification Fans

Transit Center HVAC Scheduling, Replace Thermostats $603 $1,195 2

RTU 1 Replacement $177 $32,880 185.5

Reset Garage Temperature Set Point $1,040 $256 0.2


Street Lighting Retrofit Street Lights to LED

Retrofit Parking Lot lights to LED

N/A LED Holiday Lights $1,726 $236,631 137.1

TBD 10kW Solar PV $1,446 $121,176 83.8

* Denotes projects compled following BMP's and without engineered cost savings calculated

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Alternative energy proposals

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